all stations come over to mithis is for real this time. step seven point two one two. verify and lock. command is locked. five seconds. three, two, one. standing by for capture. the most innovative software on the planet... dragon is captured. is connecting today's leading companies to places beyond it. siemens. answers.

okay. listen up. what did we learn today? we learned that there are stocks that report great quarters and they can go up and then come down. i'm focused on disney for a second. stock's off a little bit. stock goes to 53, you want to pull the trigger. we want to stay away from the ones that are up too much, biogen went up too much, cummins went up too much, but timken still makes sense. and if eaton comes down, pull the trigger. i'm jim cramer, see you tomorrow! good evening, everyone. i'm larry kudlow. this is "the kudlow report." finally, somebody, something in washington is willing to make a real budget cut. the u.s. postal service says it's ready to stop saturday delivery beginning this summer. it will save them $2 billion. unfortunately it's losing $16 billion a year. it's a start. more budget cuts may be coming. house speaker john boehner saying today he won't bail out

the president when it comes to the sequester budget cut. and eric cantor says the spending cut sequester is going through. i will talk to mr. cantor in a little while. the u.s. and global stock market continues. japan is up 32%. first up this evening, neither snow nor rain nor saturday. the post master general today announcing the postal service will stop saturday letter deliveries. take a listen. >> a typical large organization would have either cash on hand or borrowing ability. two months worth of cash to cover operating costs. in october this year the postal service had less than four days

of cash on hand. that's a scary situation. it's no situation that a business should be in. >> all right. sounds like it's time to close up shop all together and privatize the post office. four days of cash. imagine b that. let's talk about the story. dan greenhouse from btig. guy benson's political editor and david avella from go pack. dan, i want to begin with you, my post master general tonight. i think don is a good guy. he's been trying to do stuff for a while. it's congress that won't let him. is that more or less right? >> the post office is subservient to the congress. if they want to raise prices, i.e. stamp prices they are not allowed to. they can't cut saturday delivery without congress. >> is it right to cut saturday delivery? >> sure. they are in trouble.

they have to prefund retirement benefits. the fact is that mail volumes are declining. what you have done now with respect to the post office is subsidizing the direct mail commonly known as junk mail makes up 50% of all mail. >> we might have a picture of the decline in post service mail. it's staggering. last point before i get my panel in here. this is obviously not going b to help much. he's losing $16 billion a year. that might save $2 billion. get out of the weeds. do we need a post office? that's what i want to know. do we need a post office? snail mail versus e mail. >> sure. even if it's private somebody would be delivering mail. that would be probably fedex and u.p.s. now whether in 2013-14 something the government should be doing.

clearly the answer is no. what you are doing is twofold. you are subsidizing direct mail and people who live in hard to get to, remote areas of the country. like any subsidy if you don't have to pay for your decisions, i.e. living far away is costing me more money, there are no repercussions. >> this guy is nice. patrick donaghy wants to -- he's trying to survive. he wants to raise stamp prices, cut into the pensions and health care. they don't have any co-pays. they get away with murder on that. he wants to close post offices. republicans and democrats will not let him do it. this is an insane story. >> you're right. the post office should be independent from congress. they should have the authority to make decisions without having to go through congress. that doesn't mean it will last forever. i checked my e-mail. i had 851 e-mails. i checked my post office box for

the past few days. i had one piece of mail. a life insurance junk mail flyer. i don't get mail. i don't think a lot of people are sending mail. the post office formula was useful 20, 30 years ago. >> do you have a land line? >> i don't have oh one. >> i don't answer mine. if this is political patronage? what's wrong with congress? this story will go totally bankrupt and taxpayers have to -- it will be a big number. >> jobs in my backyard type of thing with people not wanting to ruffle feathers. that's what is happening in congress. on a broader level politically this is useful. the president likes to talk about teachable moments. we can see here is a long established federal entity that is going to make real -- >> budget cuts. >> and the earth won't crash into the sun. we will missouove on. if people need something on

saturday there are options. >> brilliant. >> thank you. >> you're already in the lead tonight. >> i want to get david in this. this is going to boomerang into a massive taxpayer loss. why don't we use this as a learning moment and example. the country will survive no mail on saturdays. b, i think the country survives without a post office. there is bipartisan support out there for privatization of the post office. don't forget there are generations of americans who feel connected to the post office. >> emotionally connected? what are you talking about? >> you see surveys where people

enjoy -- generations of americans enjoy getting the mail every day. does that mean it needs to continue forever? >> how much mail did you get today? >> i said generations. not keith's generation. there are generations. >> we could get them a little mailbox. there doesn't have to be anything in it. what is this going to cost? if this goes under with the liabilities of the pension and health care plan what are we talking about? >> tens of billions. >> yes. tens of billions. >> the post office employs. >> this is the worst defense i have heard. this is an obama-type defense on spending cuts. next thing you want is revenues to help the post office go through. what's go pac? i'm sorry. >> it's a teachable moment as guy talked about. this is what happens when you allow the government to come in

and run an industry that in treery is private. it is not. any decision the post office wants to make to become more efficient, they have to say mother may i. in this administration you see whether it's the epa that wants to continue to regulate the energy industry, trying to do more in the car industry, trying to take over the health care industry. >> can i just interject? you see the problems between government has mother may i decisions over the economy. >> it has nothing to do with the obama administration. the problems of the post office go back way before president obama existed. the reality is it's an inefficient organization that has to answer to the government to make decisions. the problem is people aren't using the post office. >> let me make a quick point. first of all it's not inefficient. >> you're right. i don't mean inefficient. >> i know what you mean. 50 cents you can send a letter wherever in the universe. >> that part is efficient. you're right. >> i want to make a supporting argument here. i disagree that it is

sentimental. there is a famous video of claire mchaskill longing for the days of getting mail. >> the senator? what's the story with her? >> jon stewart ripped her to shreds. >> the point that's valid is we are big city folk. in the smaller, rural parts of the country and you can speak to the congressmen representing the districts the post office is the central meeting place. i have never been to these places. there is something going on there. i respect that. >> if you go on a listening tour. >> i should. >> you're making the right point. this point will come up later with the military. it's so widely distributed. everybody has an impact on this. we do live in big cities but people in kansas don't have the same relationship. >> shouldn't have to pay for that. >> you can't have everything you want in life. i have a number. $47 trillion. do you know what $47 trillion is? from the cbo, congressional

budget office, that's u.s. federal spending for the next ten years. $47 trillion. okay? can we agree that's a big number? now the post office will add to that number. i think we should be subtracting from that number. i don't care what sentimentality or who claire mchaskill is. she shouldn't have run the race. she ran against a dope. i have to get out of here. dan greenhaus. the post master general used to be in the cabinet. it was very big. >> i always wanted to be in the government. i didn't know i would be post master general. >> you have to stick around for a while. it was not a big run on today but the u.s. and global markets did continue to rally. stocks are hot. do you know what? they are especially hot in japan. we'll try to tell you why. don't forget. free market capitalism is the best path to prosperity. the post office has to go. not demeaning mr. donahue.

now the man who taught the world this lesson, the late president's birthday, ronald reagan. now we show you some of his best moments starting with this one. >> in 1981 our critics charged that letting you keep more earnings would trigger an inflationary explosion, send interest rates soaring and destroy our economy. well, we cut your tax rates anyway by nearly 25%. what it triggered was falling inflation, falling interest rates and the strongest economic expansion in 30 years. [ male announcer ] i've seen incredible things. otherworldly things. but there are some things i've never seen before. this ge jet engine can understand 5,000 data samples per second.

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global stock market still on a tear. did you know almost 20 world indexes traded at new multi year highs this year already? did you know japan, the hottest of the hot up 3.8% just today? cnbc's seema mody joins us. >> we have seen a revival in global equities. better than expected earnings. easy money from the fed and decent economic data brought fresh money to equitieequities.

the s&p 500 and nasdaq trade at new highs. the ral di doesn't stop there. also posting sizable gains for the year. confidence in greece's financial markets and the ecb's ability to solve the debt crisis. but in asia, as you were mentioning it's all about the nikkei. the japanese i believe desk hitting a 52-month high as the yen continues to weaken against the dollar boosting exports and the yen could go lower, larry. analysts at bk asset management says prime minister baabe is expected to appoint a new governor. the global rally may not be over yet. >> you're absolutely dead-on right. let's bring in the investors. this japanese story may be the key to why the american stock market is rising. we have brian kelly from shelter harbor capital, lee munson from portfolio llc, the author of "rigged money." dan greens haus kind enough to

stay with us. what the japanese are doing, they are trying to end deflation. in doing so, they are trying to normalize the yen. that's pro growth, pro liquidity. i think it is improving the entire world's stock market and economic outlook oh. take that. >> wow! that's an awful lot to put on the bank of japan and prime minister abe. >> i never even met him. i don't know abe. i don't know a thing about him. >> it's also pro higher interest rates which is the biggest threat to the whole global stock market rally anyways. if japan rates go up, not a giant move in the world of bonds. it's game over for them. they can't afford to pay their bills. that's the danger you have here. when you have a pull-back in the market you have to watch for stocks and bonds going together.

>> dan, do you agree with the high interest rate scenario in japan put forward by the great brian kelly? do you agree? >> yes. certainly if interest rates were higher it would be a problem for the economy. the question is are interest rates going to be higher? the answer thus far is no. brian is correct a rise in a normalized environment isn't that big. >> have japanese bond rates gone up? >> not meaningfully. in the context t of what's happening they haven't actually done anything. the yen collapsed. interest rates are still low. >> lee munson. sometimes a little easy money isn't a bad thing. here in the united states we have easy money and we have easy profits still going up. i think people are under estimating our story as well, lee. >> i do. larry, i just want you to -- 2013 to be the year you learn to love the fed. i understand why you have perma bowls.

the thing we have to remember is what could end this bull market? i don't think it's going to. we have to have the fed start tightening. they are not going to. number two, we have to have an inverted yield curve. there are emerging markets but not in the united states. it's great. so we have to have an over exuberance for markets and we don't. larry, in new mexico i still have to convince people to buy stock as part of a balanced portfolio. so we have japan. it was like this fourth wheel to the economy. can't show up to work for 20 years. all of the sudden it's back. markets up 30%. they haven't even done anything. it's hope. >> middle of november, 30%. seema, in my day when i was a wall street economist and so forth, japan was, i guess like china is today. pivotal to the world economy. i don't know if that's fair. what japan did affected everybody's expectations. now that we are doing this and maybe they will grow faster i

wonder if this will trigger more stock rises here and more investors, retail coming in. they see markets rise. what do you think? do we have reports of retail coming in? >> great question. if the yen continues to weaken, you see the nikkei move higher what does it bring in terms of the global market rally? what's the effect on other emerging market indiceses like india, china, impact europe and the u.s. indices? it's a great question and a trend to follow. >> b.k., i will go so far as to say that this japanese easy move as illustrated by the decline of its currency is helping europe. they do a lot of trading with europe. europe has not had a great stock market. if you look at the aggregate i think they are too tight in the european central bank.

you have to love to like the banker. >> listen. i talked about stock and bond markets going down together. i agree. they are too tight in europe. i don't know if they are going to loosen up. spain and/or italy needs help. i'm not sure that could happen this year. i think europe goes to the political brink once again. we are used to that. it brings equity markets down. we'll see from there. >> dan, gold prices are -- >> the only oh thing on the table is if it's 12 or 24 months in europe. that's the only thing we are dealing with. >> they're going to protect them. we know that. dan, gold prices. relative to the currencies theorizing. gold prices. it's not happening in the usa. i'm not an easy money guy. you know that. i don't see it in gold and

commodities now. i don't see it. >> first the threat of a global inflationary outbreak was a scare tactic. whether we agree or disagree with the federal reserve has done and is doing. the 1970s, this is not. we'll see how it plays out. the problem is not what the fed is doing and the response to the gold price but what the fed does coming out of this. credit suisse said the gold bull run is over. people will disagree. >> down over 300 bucks. it went up too far in the first place. >> what's too far? >> i don't know. 1900 dollars. lee, i know you learned to love the fed. what about earnings? profits are the mother's milk of stocks. profits are already outperforming even in the latest reporting headquarte reporti

reporting quarter. how about that? >> we have to start watching for revised earnings reports from wall street. everyone who makes a big to do about last year in the past. we'll see 8 to 10% earnings growth for the year on the s&p. if we were just valuing from the last cycle before the crash here. the stock market would be higher. we have more profits than we did. valuations are low. quite frankly we don't need over valuation. >> we're okay. one caveat. we cannot afford to be carpet bombed by another gigantic tax hike. you run another tax hike, go after investors and entrepreneurs and a it will trickle down to the middle class. that's not good. the whole budget debate. thank you, seema. dan, brian, lee.

all right, folks. to sequester or not? that's the question. i say yes. make the budget cuts. will the house republicans hang tough? we'll ask house majority leader eric cantor about that and more in a few minutes coming up. all stations come over to mission a for a final go. this is for real this time. step seven point two one two. verify and lock. command is locked. five seconds. three, two, one.

standing by for capture. the most innovative software on the planet... dragon is captured. is connecting today's leading companies to places beyond it. siemens. answers.

and...done. did you just turn your ringer off so no one would interrupt us? oh no, i... just used my geico app to get a tow truck. it's gonna be 30 minutes. oh, so that means that we won't be stuck up here, for hours, with nothing to do. oh i get it, you wanna pass the time, huh. (holds up phone) fruit ninja!!! emergency roadside assistance. just a click away with the geico mobile app. february 6, my former boss the late ronald reagan's birthday. he changed my life. he'd be 102 today. he taught this country and me a lot. we will talk with reagan

biographer craig shirley in a few minutes. first up let's hear one of president reagan's more inspiring messages. >> let us resolve that we will stop spreading dependency and start spreading opportunity. that we will stop spreading bondage and start spreading freedom. some say growth initiatives must await final action on deficit reductions. well, the best way to reduce deficits is through economic growth. [ applause ] get ready for a lot more of that new-plane smell. we're building the youngest, most modern fleet among the largest us airlines to ensure that you are more comfortable and connected than ever. we are becoming a new american.

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welcome back to "the kudlow report." in this half hour, mahmoud ahmadinejad says iran is now a nuclear country. does that mean the rogue regime already has nuclear weapons? we'll get an answer later on. on what would have been president reagan's 102nd birthday, we will honor reagan with a look at many of his messages that resonate today. we have more of his best comments for you and we have reagan biographer craig shirley who will join us later this half hour. first up, major automatic spending cuts set to kick in march 1. republicans are gearing up for another big spending fight with the white house. president obama is urging congress to delay the cuts and

smack us with another big tax hike. earlier i had a chance to speak with eric cantor from virginia. i asked for his response by the president t. take a listen. >> here we go again, larry. all they want to do is take more money from them so it can be spent in washington and, two, kick the can. that's what this country doesn't need. we want to get the fiscal situation under control and start growing the economy again. >> would you say the house republican conference is behind the across the board spending cut sequester? about $85 billion in 2013. is your conference behind it? >> what you could accurately say about our conference, we have tried two time to replace the sequester cuts with cut that is

go to the main drivers of the deficit which are the entitlement programs. we have spoken before. this is the exponential growth in spending and how we get it under control is deal with entitlements. the president missed every opportunity to join us in solving the b problem. so now we are facing the sequester and, again, i think the house republicans are determined to try and get our spending under control so we can start sending the signal that we are going to grow the economy again, not the government. >> cutting spending can be pro kbro growth. are you saying we will have the sequester? is that your forecast? we'll get the spending sequester? >> i'm hoping we can get the entitlement situation addressed. that's the point. you will see us come forward with the budget that will project to be balanced in ten years.

again, all because we want to grow this economy, not grow government. >> all right. now in your speech yesterday, it seemed different from your normal speech aimed at middle class families. heavy emphasis on education, on health care, and a surprising emphasis on immigration reform. we'll get to that later. is this a kinder, gentler eric cantor? is this a kinder and gentler republican party? >> you know, i think this is a demonstration of our conservative principles. you know, steeped in self-reliance, in faith in the individual and families. and an insistence on accountability in government. it's putting these principles to work to demonstrate that conservative principles and policies actually benefit people, can help make life work again. >> is it fair to say, in all seriousness, is it fair to say in the last election and who knows when the gop really wasn't

directing its policies at the middle class and now you're trying to correct that? is that one of your main themes, main ideas? >> no, larry. i think the lesson learned from the last election is we stood strong on the policies trying to right size the government, to manage down the debt and deficit. for some reason we were unable to demonstrate, or we didn't complete the sentence, if you will, to say managing down the debt and deficit, balancing the budget will ak aly benefit working people in this country. because we don't want to see a debt crisis imposed where interest rates skyrocket. the need for higher taxes affects working people. and their lives become a lot more difficult. we don't want that. >> switching gears a little bit. you came out in favor of the kids of illegal immigrants. the kids becoming citizens, getting citizenship. i have never heard you say that

before. why is that your new position? we are not going to hold kids responsible for the actions of their parents. we know in the days of old and some of the european countries it used to be that children were held responsible for the debts of their parents. when you have kids brought here through no fault of their own and know no other place than america as home, i think we ought to be allowing those kids the opportunity of permanent legal residency and citizenship. >> you won't go as far as senator marco rubio willing to give them workers permits and put them in a 10 or 15-year path to oh citizenship, the illegal parents. you're not going that far? >> there are a lot of issues that need to be resolved. first we have to put border security first.

we are a country of laws. we have built an innovation culture that provides more opportunity than in the history of the world. we have to be sensitive to the families that are here. many of whom are part of the fabric of our country for sure. i don't know the exact number but millions of people are in line legally, waiting for entry. the kids have become a part of our country. we have to give them the opportunity to become americans. >> path to citizenship. before we wrap up, i have known you many years. i want to be sure this kinder gentler eric cantor which is interesting. it's okay. you're not losing your zeal for flat tax reform, lower tax rates, get rid of the detuxs,

grow the economy at four to five percent. growth is the solution. you're not jumping off the ship, are you? >> no. >> after all, growth can be kinder and gentler. >> growth is kinder and gentler. i'm all for growth. we have a problem in this down. republicans are in charge of the t house. if we want tax reform, that's the kind of tax reform we want. unfortunately the president's version of tax reform is raising taxes and raising tax rates. we saw it in the beginning of the year. the senate followed suit. we're going to have to fight hard and convince the american people that it's our kind of tax reform that will produce a growing economy and yield more opportunity for more working families so their life can work again. >> eric cantor, republican from virginia. as always, sir, we appreciate you. >> thank you, larry. >> let's bring back our panel. keith, guy and david.

keith, did you hear him say he was for the sequester? >> i think i heard that. >> i'm not sure. >> i think i heard it. i'm not sure what's going to happen. i heard earlier that -- he indicated there would be a sequester and no tax increase. >> that was my reading. boehner said the same thing today. did you hear him say, yes, there will be a sequester? >> no. i think he hinted at it. we have heard other republican leaders say that. i would have preferred to hear majority leader cantor say if the president cannot come together with us with other cuts we are absolutely committed to forcing through the sequester which he conceptualized and signed into law. he danced around it, made the good point that the republicans in the house tried twice to make

it smarter in doing the cuts. it's important from a strategic messaging and tactical a standpoint for republicans to be willing to shoot the proverbial hostage. >> somebody has to cut budget spending sometime in my lifetime. just say yes. >> house republicans -- guy made the point, too. we passed two alternatives to sequestration. this president demanded it to be this way. this is the president who said it will be this way or no way. we are going to take the meat cleaver to this spending bill. this is the only way we'll do itment and we'll raise taxes. so the direction we are going now has been led by the president. republicans tried an alternative path in having targeted smart cuts. where does it fail? in the united states senate. harry reid can't lead a senate to doing fiscally responsible things. >> or anything.

>> i'm not sure i understand what you were saying. if you're indicating that the republicans should go out and say they support the sequester, think you were saying the same thing. that's political suicide for them. even though it may be the right thing what happens is once the sequester takes effect if there are layoffs and people rebel against it, republicans are solely owning that. they are responsible for that. >> it's the president's idea. the white house came up with it. >> the republicans are saying they want the sequester. >> the president threatened to veto. they said we want to undo part of the sequester. the president said, i will veto that if you do. he's completely changed his tune. he's flip-flopping all over the place. this is his sequester. he came up with with it, signed it into law and republicans are saying, remember, this whole sequester is from the 2011 -- this is two-year-old spending cuts. we need to cut spending. >> by the way, it's not going to hurt the economy and the country yearns for spending cuts.

that's my take. >> what country? >> the whole country. stay with us. we'll be right back. right now we are talking iran and nukes. iran's president madahmadinejads nation is nuclear capable. we'll try to get answers. it is ronald reagan's birthday today. he may have been born in 1911, but his message is important when it comes to government spending. take a listen. >> beyond these essentials, i believe it is clear our federal government is overgrown and overweight. indeed it is time our government should go on a diet. [ cheers and applause ] at 1:45, the aflac duck was brought in

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has iran crossed the red line on nuclear capability? in an interview madiew mahmoud ahmadinejad said iran is already a nuclear estate. he said there is no plan to attack israel, at least not yet if anybody believes that. let's talk to the co-author of

"containing and deterring a nuclear iran." do they have the nuclear bomb? what's he talking about? >> i think ahmadinejad is closer to right than wrong. the truth is they have all the necessary components to put together a bomb within weeks or months. >> why do you think he made the statement? he's going to cairo, egypt. is he trying to be a big shot, sending us a message? >> i think it is a mess sang to the arab world. there is a big arab summit going on. he's closer to israel than he's been in a long time. i think it is a message to the united states. sure, we are happy to talk to you one on one. we'll talk to you about our nuclear weapons program. you can talk about how you will capitulate. >> why do you think he said he doesn't want to attack israel? >> i think he did it for p.r.

reasons. right now iran probably doesn't have significant nuclear material to construct more than one or two bombs. they can't put it on a missile and send it anywhere. we don't want to attack israel -- now. >> mahmoud ahmadinejad will be out of office in a few months, this spring? when is the election. >> in june. >> will that change the situation in iran? change iranian relations with the u.s. or israel? >> absolutely not. he's been out of favor with the supreme leader who is the decision maker. the parliament has thrown out a number of his cabinet. the next guy will be important, but the notion he will be more open to getting rid of iran's nuclear weapons is ridiculous.

morsy gave him the back of his hand. does that make him look worse? >> i don't think so. they have been desperate for a visit. they want to show the world that the sunny and shy i can't can stand together against the west. morsy has no love for shy i can't extremists. that shouldn't make us feel better about morsy. kissinger said i hope they both lose. i hope they both lose. >> this islamic summit. all of egypt is teetering on the brink. maybe the government is teetering on the brink. economy not good. they have had internal problems. audit arabia, they are a passive player and the united states is becoming energy independent.

this looks to me like a decline in the middle east. a decline for them. they may not see it, but it is. >> the problem is why do you see decline in the middle east amongst traditional powers. you are seeing a rise of extremists, whether it is the extreme fringes of the muslim brotherhood or iran sponsored groups. at the same time you are seeing a decline in the united states. you're seeing us. the president decided today not to send a second carrier battle group into the middle east. it is the first time we haven't had a second group in a long time. we have allies there. it's not really all about oil. >> we'll leave it there. >> thank you very much for helping out. president reagan also went after the opposition with humor and biting prose. he was an optimist and a uniter as we mark his birthday this evening we look at the way he expected the best from america. we'll talk about how his message

is still important today. first, please watch this. >> someone once said the difference between an american and any other kind of american is that an a american lives in anticipation of the future because he knows it will be a great place. other people fear the future as just a repetition of past failures. there is a lot of truth in that. if there is one thing we are sure of it is that history need not be relived, that nothing is impossible and that man is capable of improving his circumstances beyond what we are told is fact. all stations come over to mission a for a final go.

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superderivatives introduces dgx. data done differently. in honor of the late president's 107th birthday today was declared ronald reagan day in some states. a reminder that nearly nine years after his death, reagan's legacy continues to live on. here now is reagan scholar craig shirley who's written two books on the reagan campaigns and is working on a book about the post presidency. welcome back. >> thank you, larry. >> first what comes to mind is peace and prosperity. that gives you popularity. i worked for the guy. there was more to it than that. >> absolutely. you were playing the speeches earlier. you listen to the radio broadcast between 1975 and 179.

he broadcast commentaries across the country. most of which he wrote himself. most of the speeches he wrote himself going back to his time as head of the screen actors guild. they were intellectual, funny, engaging but you came away learning something about the world, philosophy, freedom, about the assignment of power which was the most important thing to reagan. power belonged with the individual, not with the state. >> the optimism that goes with freedom of the individual. >> absolutely. the two things you remember and i remember is that he was always talking about the future and he was always talking about young americans. in fact, some of his most important policy speeches were given on college campuses whether it was moscow state, eureka or notre dame. he was always talking about the future. by the time he leaves office in january of 1989 his overall approval rating is 73%. among voters under 30 was 85%.

>> wow. guy benson, there is a weird thing that goes around. sometimes in conservative circles but likely liberal to moderate circles. if reagan were around today he could not win the nomination for president. >> they say it all the time. >> ridiculous. >> i don't get it. >> i say, did you see the 2012 primary? are you kidding me? by the way, when i saw the story just the way my brain works, i saw 40 governors. who are the other ten? the ten who refused to honor reagan are democrats from liberal precincts except for public service announcement for arkansas and kentucky. your democrat governors refused to do it. let them hear about it. >> if reagan had run in the republican nominating primaries he wouldn't have won? >> from a competency level he was clearly more competent than

most who ran. >> larry, may i jump in? >> first of all, the 22nd amendment would have prevented him from running. >> besides that. >> it's a club used by the left to bash the conservatives or the republicans by saying reagan would be out of kilter with the modern republican party. ever since he was renominated in 1988 we have nominated two bushes, john mccain and mitt romney, all men by vast degrees to the left of reagan. >> i agree with what you are saying, craig. there is a point that reagan was a person who could compromise with democrats. he did it with tip o'neal. reagan not only cut taxes but raised tack. he was a complex person, optimistic, forward-looking. he could actually do imkbrags reform. he believed in the earned income tax credit. he was a person who proposed ideas and policies that would not necessarily be consistent be with policies proposed by today's republicans.

that's the point democrats are making. >> he wasn't a centrist. he was a conservative who was a populist. he wasn't a sucker. he never did the 82 deal with tip o'neal and wrote in his autobiography he had been suckered on that and would never engage -- >> he would never do that again. the tax stuff were with small revenue bills that had to do with cleaning up tax reform. david, today's republican crop. i would like you to hear the clips we have been playing. freedom, lower tax rates, smaller government and optimism. are republicans not optimistic enough? is that one of the problems here? >> no. look at the state level. all of the policies that president reagan promoted. that's what republican governors are doing. that's why nine of the 11 states with job growth are run by governors in republican --

states with republican governors. scott walker, rick scott, john kasic. martinez, sandval. it must be great justification for president reagan that even folkses on the other side like keith are praising his organization. >> keith's honest about this stuff. reagan had to make a deal. i agree. i was there for several keedeal. one was bad, the 83 tax and spend. the 82 deal kept them going for three decades. the 86 tax reform deal was a good deal. is that lacking in the gop now -- the art of deal-making? reagan knew how to do it. >> you left off the list the 86 immigration deal which turned out to be a disaster.

the tax and spend deal and the immigration deal where conservatives learned from that saying when liberals promise that the tax cuts or the spending cuts are going to happen or the enforcement will happen, those never necessarily seem to materialize. maybe there were lessons learned. >> let me jump in. >> real quick. >> the reason it failed was it was unenforced by the bush administration. the second, many immigrants who came here came from communist oppression in nicaragua and cuba. they were political refugees. >> i agree. the 86 bill is misunderstood. craig, keith, guy, appreciate it very much. david stayed on set. that's it for this evening's show. i'm larry kudlow. i worked for reagan and i loved it. i'm still grateful. see you tomorrow night.